All Forum Posts by: Tim Delaney

Congrats on getting started! I’m not familiar with those markets, but I would suggest finding some meetups and attending as many as you can. That will be the best spot to meet an investor friendly agent in person or at least meet other investors in your markets that can help connect you to the right agents.

 I’m sure the prices for things are out of date, but they were always going to vary by market anyway. The principles would still be valid though 

There is some great advice here already. My approach was to partner with a GC, so he handles the rehab estimates with his years of experience.

Another option is to read J Scott’s book on estimating rehab costs.

A lot going on in your question. As someone that over analyzes things as well, I’d suggest you step back and think about what your goals are in order to help determine what path to take.

I like JD’s suggestion about reinvesting in your business. Can $25k in more marketing or equipment or staff increase your profitability even more? Or free up more of your time depending on your goals? Or can you acquire another business in an adjacent field that increases profitability?

I also noticed you left out an option to park that money in index funds and let it grow. I’m guessing that is because of your pessimistic view on the economy right now, but even if the markets dip temporarily, based on history, they will rebound to even higher points (I know just cause it’s happened before doesn’t guarantee it will happen again).

Personally I have a successful business, but opted to diversify into real estate because my industry is heavily regulated and one change of a law could make me MUCH less profitable. However, I got into real estate mostly relying on OPM - private lenders, seller financing, and business lines of credit.

I also don’t like the idea of buying turnkey properties at a premium. I don’t know the Memphis market, but I’m guessing there is not crazy appreciation. So if you are not cash flowing and there isn’t appreciation then the only advantage you are getting is debt pay down. If you are going into a moderate appreciation area I’d be looking for great cash flow.

I completely agree with Jonathan, do not compare yourself to where others are or what they did. If you used FHA you have to live in the property for a year anyway, so use that time to save and buy another one in a year but maybe try a low down Conventional instead of FHA. Adding a property per year for the next few years will set you up very nicely for the future.

It’s also important to figure out what your goals are and then work backwards from there. There is no sense rushing if you don’t even know where you are rushing too.

There are a million low cost or free options out there. And some expensive ones for larger operations. Personally I use RentRedi (free with BP Pro) for management and Zillow for applications and screening.

Welcome to BP! The fact that you have already owned and sold a rental property gives you a great experience to start from.

In terms of the best place to invest - that is whatever place meets your criteria, goals and investing style.

Personally flips have not been working as well for me lately, but when we get the right BRRRR deal those are still working well. But I'm sure that depending on the area that experience will vary.

Sounds like a great idea! I would suggest you talk to a mortgage broker or a bank though - if those homes are zoned commercial you will probably have a hard time getting an FHA or low down Conventional mortgage.

Personally I try to push out my terms on all my loans even when investments could cash flow on shorter term loans. I don’t focus on the total interest paid over time metric. Because of the time value of money I would rather have the cash flow today to reinvest in other projects.

You mention that that seems to rely on appreciation- I think it is the opposite, by pushing out the term I am focused on cash flow. Whether or not the asset appreciates in 25 years I still have a paid off building.

The risk is if the asset declines in value AND you have to sell it for some reason. If it declines temporarily but you have good cash flow then it doesn’t matter.

Thats my two cents, hope it helps.